Penalty notice under section 270A failed for non-specification of charge and mismatch between initiation and levy.

Penalty under section 270A of the Income-tax Act was unsustainable where the notice under section 274 read with section 270A did not specify the exact limb of default and the final levy proceeded on a different charge from the one indicated at initiation. The record showed reference to under-reporting as a consequence of misreporting, but the penalty was ultimately imposed for under-reporting of income. Because the notice failed to identify the particular clause of section 270A(9) and the basis of initiation did not match the basis of levy, the penalty was held to be without basis and deleted in favour of the assessee.

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Issues: Whether the penalty imposed under section 270A of the Income-tax Act, 1961 was sustainable when the notice under section 274 read with section 270A did not specify the exact limb of default and the penalty was ultimately levied on a charge different from the one indicated in the notice.

Analysis: The notice initiating penalty proceedings referred to under-reporting as a consequence of misreporting, but it did not specify the particular clause of section 270A(9). The assessment record also showed satisfaction for under-reporting as a consequence of misreporting, whereas the final penalty was levied for under-reporting of income. The lack of a specific charge in the notice and the mismatch between the basis of initiation and the basis of levy rendered the penalty unsustainable.

Conclusion: The penalty under section 270A was held to be without basis and was deleted, in favour of the assessee.

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